How to Organize Debits

If you are tired of feeling like you are drowning in debt then its time to organize your debt and get a hold of your financial situation. Debt not only has an effect on your personal finances, but mentally as you watch yourself getting deeper and deeper in debt. Its time to organize those debts so you can get them paid off.

Instructions

1

Make a list of all the debts you have currently. Include total amount due, the minimum payment and the interest rate.

2

Assign your debt a category. This could be debts with the highest interest rates, past-due debts and current debts.

3

Prioritize your debts. There are different ways to do this and you have to decide which will be the most effect and productive for you. The goal of prioritizing is to find one debt to focus on and get that paid off.

If you are easily discouraged, paying off a low balance quickly can often give you the jump start that you need to continue to pay down those debts. Make a list of the smallest debt to the largest.

If you goal is to pay off the highest interest first, make a list of interest rates debt in descending order. If there is a debt that has been bugging you, or you owe a personal friend or family, pay this debt off first and put in order of dislike.

4

Make a spreadsheet or write out your action plan on a piece of paper. If you do this with a spreadsheet program, you can make a budget and track what is being paid off and the amount going towards the debt.

5

Begin paying more than the minimum toward the first debt -- even an extra $10 over the minimum is helpful. Continue making the minimum payments on all other debt. When the first debt is paid off, take the original amount due and the extra money that you put with it and apply that towards the next debt. Continue this process until you pay down each debt on the list.

As you continue to pay off more and more debt, the amount being paid to a debt will begin to grow and snowball into a larger amount. This is extremely effective when it comes to the amount you are paying in interest.